Feed-in Tariff’s (FIT) draft rules were released by Energy Regulatory Commission (ERC) that will regulate the establishment and approvals of FITs for the renewable energy charge (REC) collected from the consumers and paid to the renewable energy based electricity producers. Specifically energy derived from: wind, solar, ocean, run-of-river hydro power and biomass.
The FIT basically offers guaranteed payments per kilowatt-hour to renewable energy developers for the electricity they produce as an incentive for entering this business which will help them recoup their investment faster. Am not sure if this was the incentive covered in the Renewable Energy Law of the Philippines (item no. 5).
Update: according to this report it is part of the RE Law covered under Section 7 with the FIT having an effectivity period of 15 years.
The ERC believes that the NGCP (National Grid Corp. of the Philippines) will be the best entity to manage the collected REC funds since they have all the metering information and actively operate the grid.
The National Renewable Energy Board (NREB) meanwhile will be tasked to calculate the FITs for the specific Renewable Energy based source (wind, solar, etc) for the ERC’s approval.
Shades of old Independent Power Producer (IPP) contracts with guaranteed payment clauses?, who know? These contracts were signed by the government during the energy crisis of the early nineties that were plaguing the Ramos Administration. Wherein even if the grid had sufficient energy to meet the demand, the IPP’s were paid for electricity not being used by the consumers from them. The Ramos Administration defended this clause by saying that it was the only way to entice the private sector to invest the large funds needed to build a power plant. Having lived through that experience of rotating brownouts and having had to solve algebraic equations under candle light I could empathize with the government’s move due to the severity of the situation.
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Category: Law, Clean Energy
